Kongsberg's 'Affordable Mass' Pivot: Zone 5 and the Missile Subscription Model
Revenue tops NOK 10B, backlog at NOK 158B, and a new bet on high-volume interceptors shifts the company's center of gravity.
KOG.OL · Earnings Call · 2026-07-13
Kongsberg Gruppen entered the summer with a message: defense is no longer about the most advanced system alone, but about volume, production cadence, and 'cost per effect.' That is the thesis behind the Zone 5 acquisition, closed on June 12, which puts the Norwegian group squarely into the market for high-volume, low-cost interceptors. In Q2 2026, revenues crossed NOK 10 billion for the first time (NOK 10.4B, up 31% YoY), the order backlog climbed to a record NOK 158 billion, and the company reaffirmed ambitions to triple revenue to NOK 100 billion by 2029 and NOK 150 billion by 2033.
"The second quarter of 2026 was characterized by high activity levels across the company, both in new orders and in our production facilities." — CEO Eirik Lie.
From precision to volume
Zone 5 is the strategic pivot. Founded in 2011, the California-based maker of 'affordable mass' interceptors brings two products: Rusty Dagger, a cost-effective strike missile, and White Spike, an air-defense interceptor. subscription model is the innovation CEO Eirik Lie is pushing — a subscription model where customers pay to secure fast production scale-up rather than buying fixed volumes. For very high volumes, it is unsustainable to produce at maximum levels every year. We are therefore proposing a subscription model to countries by which the manufacturer will be paid to secure that they can scale up production fast within a fixed time frame.
The company expects Zone 5 to generate more than NOK 10 billion in annual revenue in the medium term — a meaningful slice of the NOK 150B 2033 target.
Kongsberg is also integrating White Spike into its air defense and counter-UAS offering, and plans to build European production hubs for high-volume missiles.
Margins: the cost of scale
Growth is coming at a margin cost. Defense Systems' EBIT margin fell from 19.6% in Q2 2025 to 17.7% this quarter. CFO Martin Wien Fjell pointed to project mix: “the quarter included the new Norwegian donation programs to Ukraine, and associated with this are lower margins.” — 2026-07-13 That juxtaposition echoes a recurring tension from prior calls. In Q1 2025, CFO Mette Bjørgen explained how Norway deliveries are under a profit cap regime: “deliveries to Norway are subject to a profit cap regime, which means that it's a cost plus contract.” — Mette Bjørgen, Executive Vice President and Chief Financial Officer · 2025-05-11 Now, Q2's mix includes both low-margin donations and a one-off IFRS hit from a revoked export license to Malaysia — an impact the CFO said was 'more or less offset' by positive one-offs. “The IFRS impact of the revoked export license to Malaysia... due to the ongoing negotiations, we will not go into further details.” — 2026-07-13
Riding the NATO wave
The company is not just executing an internal pivot; it is riding a NATO summit tailwind. At the Ankara summit, NATO countries announced over $50 billion in new procurement, and several awards are directly relevant: Canada joined the German-Norwegian submarine program; Lithuania signed for Norwegian-designed vessels; Belgium joined a NASAMS acquisition. CEO Eirik Lie: “The messages from NATO were clear. Europe must continue to invest in its own defense capabilities and seek joint procurements with other countries.” — 2026-07-13 Meanwhile, orders for the Joint Strike Missile (JSM) totaled NOK 11 billion in the quarter, including repeat orders from Germany and the U.S., and a new contract with Canada. Earlier this year, the company was already describing a 'strong backlog' and aggressive growth targets.
Kongsberg's Defense Systems division grew revenue 53% YoY, driven by air defense and weapon stations, including initial progress on the CUAS for Poland. Yet the company is also absorbing a one-time export license revocation for Malaysia — a reminder that geopolitical exposure cuts both ways.
The company is also scaling production facilities globally — new missile factories in the U.S. and Australia are under construction, and Poland is being prepared. The supply chain remains the chief constraint, as CEO Lie noted: “We have to be realistic in the sense that we all stated that the biggest challenge is to secure the supply chain.” — 2026-07-13